Unemployment Through Learning from Experience

  • Steve Alpern
  • Dennis J. Snower
Part of the International Economic Association Series book series (IEA)

Abstract

This paper analyses how workers’ wage claims can serve as a learning tool. We argue that when workers have some market power and face substantial uncertainty in the labour market, it may be in their interests to formulate their wage claims with a view to the information thereby revealed, in order to make more informed wage claims in the future. This learning behaviour can have an important by-product: unemployment. Our analysis shows how the process of information acquisition through wage claims generates:
  1. (a)

    rates of youth unemployment and long-term unemployment that are higher;

     
  2. (b)

    dismissal probabilities for incumbent workers that are lower than would otherwise be the case.

     

Keywords

Income Straw Rium Omic Monopoly 

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Copyright information

© International Economic Association 1991

Authors and Affiliations

  • Steve Alpern
    • 1
  • Dennis J. Snower
    • 2
  1. 1.London School of EconomicsUK
  2. 2.Birkbeck CollegeUniversity of LondonUK

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